Steel firms focus on MRO supplies in exchange trial

Anglo-Dutch steel group Corus will begin talks this week with suppliers for pilot runs of e-marketplace BuyforMetals.com.

The initial focus will be on maintenance, repair and operations (MRO) suppliers, Roger Thackery, director of e-procurement at Corus, told SM. "The early categories are steel rolls, paint, bearings, electrical components and switchgear," he said.

A memorandum of understanding was signed last June by Corus, Arbed Aceravia, Usinor and Thyssen Krupp Steel (TKS) to develop the site, equally owned by the four steel firms. Other metal producers will be invited to join.

Patrick Doolan, Corus's director of supplies and transport, stressed that BuyforMetals.com must first clear European Commission cartel hurdles before it handles any transactions. "We must make it clear we are not incorporated yet and we cannot perform any transactions. These are just pilot runs to check systems," he said.

BuyforMetals.com's start date has not been decided, added Doolan. "We have already had a very constructive dialogue with the regulatory authorities and going through the form of submissions of our proposals."

Because TKS is based in Germany, BuyforMetals.com also needs the approval of the German government, said Doolan. The EC's competition directorate has to be reassured that the four shareholders, which make up 50 per cent of Europe's steelmaking capacity, will not aggregate their spend and, in effect, distort supplier competition.

The four companies have also concentrated on making BuyforMetals.com a low-cost platform, said Doolan.

Corus announced major plant closures and 6,000 UK job losses in January. It reported a £350 million operating loss for 2000.